PETALING JAYA: Icon Offshore Bhd is targeting to raise up to RM250mil from corporate exercises including share consolidation and rights issue with free detachable warrants.
In a filing with Bursa Malaysia yesterday, the oil and gas service provider said the proceeds would be used to pare down its debt.
Icon had also announced a debt restructuring exercise involving RM577mil borrowings.
“These exercises are part of Icon’s ongoing efforts to strengthen the balance sheet and position it on stronger financial footing moving forward.
“The debt restructuring and rights Issue are intended to reduce the company’s borrowings and better align its cash flow from operations to its debt obligation which will in turn bring positive impact to the company’s financials in the long run,” Icon’s acting chief executive officer Captain Hassan Ali said in a statement.
The fund raising exercise and debt restructuring is expected to be completed by end of this year.
Hassan said the proposed exercises would reduce Icon’s gearing ratio to 1.14 times from 9.16 times currently, assuming right issue amount of RM250mil.
He said Icon’s single largest shareholder Ekuiti Nasional Bhd (Ekuinas), which holds its 42.3% through Hallmark Odyssey Sdn. Bhd is committed to subscribe up to RM183mil of the proposed rights issue.
“Moving forward, we will continue to be committed in delivering results and enhancing value for our shareholders,” Hassan said.
To pave way for the rights issue, Icon Offshore, which share price is trading at 7 sen a share, will first undertake a share consolidation exercise of every 50 existing ordinary shares in Icon into 1 ordinary share.
Additionally, Icon said it is also restructuring its debt by executing supplemental agreements with its various lenders.
As at end-March, Icon’s borrowings stood at RM648.71mil, mainly mainly made of short-term borrowings. The company has accumulated losses of RM854.43mil and has been in the red for four consecutive years.
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